Sam Fletcher
Senior Writer
HOUSTON, Feb. 20 -- Energy prices were reported lower during early trading Feb. 20 as US markets reopened after the holiday weekend, partly because a comment by Iranian President Mahmoud Ahmadinejad that Iran would stop its uranium enrichment program if the Western nations will do the same.
"While a resolution at this point is still uncertain, the rhetoric from Iran is leading many traders to believe a peaceful settlement could be on the horizon, said analysts in the Houston office of Raymond James & Associates Inc. However, they added, "We remain skeptical."
The early decline in oil prices was partially stemmed by the Feb. 20 expiration of the March contract for benchmark US light, sweet crudes. "Currently, the March contract is trading at a marked increase (15%) over the February contract," said Raymond James analysts. However, near-term forecasts for warmer weather apparently have halted a 2-month rally in natural gas prices, they said.
Raymond James analysts said, "We remain very bullish on the long-term outlook for energy prices and the resultant robust activity levels for oil service companies worldwide. Granted, our 2007 forecast of $64/bbl for oil and $7.50/Mcf for gas certainly represents a moderation from the recent 4-year run-up in energy prices. However, it is important to realize that under these circumstances, most E&P companies worldwide continue to spend at record levels, which is driving oil service demand above levels not seen in decades."
The US spot markets and floor trading for energy futures on the New York Mercantile Exchange were closed Feb. 19 for the Presidents Day holiday in the US.
However, the average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes inched up by 2¢ to $53.58/bbl.
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